Inflation falls to 9.49% in November

Bangladesh's headline inflation fell to a seven-month low of 9.49% in November, a welcome respite from recent highs, according to Bangladesh Bureau of Statistics (BBS) data released.

This marks a notable decline from October's 9.93%. The previous low of 9.24% was recorded in April before a surge to 9.94% in May.

In a year-on-year comparison, the headline inflation rate in November 2022 was 8.85%. 

According to BBS data, both food and non-food inflation declined in November. 

Food inflation eased to 10.76% in November from 12.56% in the previous month. Food inflation was 8.14% in November last year.

Non-food inflation eased to 8.16% in November from 8.30% in October. Non-food inflation was 9.98% in November last year.

Dr Zahid Hussain, the former lead economist of the World Bank's Dhaka office, attributed the decline in food inflation to bumper rice harvests, with Aman production this year surpassing even last year's historic highs. Boro yields have also been favourable, and the import of essential items like eggs and onions has eased.

Among non-food inflation, healthcare has defied the trend, dipping into negative territory for three months now. This stands in stark contrast to other goods, where price increases are simply slowing down. Dr Zahid Hussain finds this puzzling, saying, "Has the price of medicine [and healthcare products] actually gone down? It doesn't seem to add up."

Dr Zahid Hussain also noted that transportation inflation has eased, suggesting a decline in transportation demand. Additionally, prices of miscellaneous items have fallen. 

While overall non-food inflation has shown signs of easing, certain sectors, such as clothing, footwear, and hotel-restaurant and housing industries, have seen a rise in price inflation. This indicates that demand remains strong in these sectors, the economist said.

Dr Mustafa K Mujeri, the former director general of the Bangladesh Institute of Development Studies (BIDS) and chief economist of the Bangladesh Bank, said the seasonal abundance of certain food products and recent policy measures by the central bank are contributing to the current decline in inflation. 

However, he warns against complacency, stating that the risk of inflation resurgence remains high in the coming months.

Urban and rural inflation

According to BBS data, rural inflation dipped to 9.62% in November, down from 9.99% in October. This welcome decline extends to food prices, which eased to 10.86% from 12.53% in the previous month. Meanwhile, non-food inflation remained largely stable at 8.00%, compared to 8.01% in October.

Urban inflation retreated to 9.16% in November from October's 9.72%. This easing trend extended to food prices, which softened to 10.58% from 12.58% in the previous month. Non-food inflation also saw a slight dip, settling at 8.17% compared to 8.50% in October.

Moreover, the wage rate rose to 7.72% in November from 7.69% in the previous month.